Royalty Pharma today formally submitted its $11.25 per share bid for Elan to the company's shareholders, standing by its reduced price in the face of Elan's insistence it is worth more.
Elan had rejected Royalty's bid last month in a takeover saga that has entered its third month.
Royalty made its initial approach in February, attracted by the promise of lucrative revenues from Elan's multiple sclerosis drug Tysabri.
But Elan has fought to maintain its independence through a series of manoeuvres designed to frustrate the bid, which is contingent on 90% acceptances.
Elan sold its 50% interest in the blockbuster MS drug to US partner Biogen Idec for $3.25 billion plus royalty rights of up to 25%. It said it will hand over a fifth of that royalty stream to shareholders.
Royalty said today it believed its offer put an implied value of $3.9 billion on Tysabri, a price shareholders should welcome, but added it was not prepared to pay over the odds to add the drug to its stable of royalty streams.
"Royalty Pharma takes note of recent multiple sclerosis market trends, specifically slowing net patient additions for Tysabri reported by Biogen for Q1 and the strong initial launch of (MS pill) Tecfidera," Royalty chief executive Pablo Legorreta said in a statement.
"Although Royalty Pharma continues to be interested in acquiring Elan, Royalty Pharma is a disciplined financial buyer and is only prepared to offer a price for Elan that reflects the fundamental value of the Tysabri royalty,'' he added.
Royalty last month lowered its bid to $11.25 a share from an earlier $12, pricing in the result of a $1 billion share buyback by Elan.
Legorreta said the buyback was an attempt to frustrate Royalty's offer and warned shareholders that the alternative they face was to accept the risks of Elan management's acquisition strategy.
Some analysts have questioned Elan's lack of experience in pulling off major deals, while others believe Royalty needs to come back with improved terms to tempt shareholders.